UPDATE:

PROBLEM SOLVED!

In case anyone else has the problem I did - i.e. SHIFTOUT not generating any signals, here is how I solved it:

I should have followed the three standard debugging rules when it comes to odd behaviour in PICs:

1. Check the MCLR pin isn't held low (it wasn't)
2. Check there is a clock signal (there was)
3. Check the CONFIG bits - HERES THE PROBLEM!

I went through all of the CONFIG options and discovered that with Extended Instruction Set enabled SHIFTOUT did not work, but as soon as it was disabled everything worked as expected!

I guess the simulation doesn't differentiate between extended and non-extended and just works in either case.

Hope this helps anyone who has the same problem.